Blog of Intellectual Capital

The Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of Rio Grande Neurosciences, Inc.

Further to Gerbsman Partners sales letters of December 20, 2016 and December 13, 2016 regarding the sale of certain assets of Rio Grande Neurosciences, Inc. (“RGN”), I am attaching an updated Asset Purchase Agreement (“APA”) that is required with any bid, for interested parties bidding on the assets and IP of RGN. Also, I am attaching an “Executive Summary” that supplements the detailed information in the sales letter you have received and an updated “NDA” (Exhibit A). Please also see attached an outline of information in the “due diligence” room at RGN

Ken, Dennis and I will be following up to review the Bidding Process, schedule due diligence meetings and answer any questions regarding the “Date Certain M&A Process”.

Gerbsman Partners has been retained by RGN  to solicit interest for the acquisition of part or substantially all of RGN’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “RGN Assets”).

Any and all the assets of RGN will be sold on an “as is, where is” basis and will be subject to “The Bidding Process for Interested Buyers”, outlined below.

Prior to the bid date of January 24, 2017, I would encourage all interested parties to have their counsel speak with Stephen Juelsgaard, Esq. stevejue@hotmail.com at 650 454–1782 regarding reviewing and negotiating the attached “APA”. He is available to discuss any questions or comments of a legal nature relating to the transactions contemplated by the “APA”.

IMPORTANT LEGAL NOTICE

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to RGN’s Assets has been supplied by RGN. It has not been independently investigated or verified by Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of RGN’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the RGN Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of RGN and Gerbsman Partners. Without limiting the generality of the foregoing, RGN and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the RGN Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a Confidential Disclosure Agreement (attached hereto as Appendix A) to have access to key members of management and intellectual capital teams and the due diligence “war room” documentation (“Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has had an opportunity to inspect and examine the RGN Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the RGN Assets. Each sealed bid must be submitted so that it is received by Gerbsman Partners no later than Monday, January 24, 2017 at 3:00pm Pacific Standard Time (the “Bid Deadline”) at 211 Laurel Grove Avenue, Kentfield, CA 94904. Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in an identifiable way. Specifically, RGN’s three core assets, multicoil transcranial magnetic stimulation, pulsed electromagnetic field technology, and closed-loop transcranial electrical stimulation platform, can be bid on in whole or in part.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase. All bids must be accompanied by a refundable deposit in the amount of $200,000 (payable Rio Grande Neurosciences, Inc.). The deposit should be wired to an escrow agent who will be outlined in the next update. The winning bidder will be notified within 3 business days of the Bid Deadline. Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder.

RGN reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale. Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

RGN will require the successful bidder to close within a 7 day period. Any or all of the assets of RGN will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the RGN Assets shall be the sole responsibility of the successful bidder and shall be paid to RGN at the closing of each transaction.

For additional information, please see below and/or contact:

Steven R. Gerbsman
Gerbsman Partners
(415) 456-0628
steve@gerbsmanpartners.com

Kenneth Hardesty
Gerbsman Partners
(408) 591-7528
ken@gerbsmanpartners.com